MARKET SNAPSHOT: Stock Market Skids Lower In Early Action Ahead Of Powell Speech
26 June 2019 - 12:02AM
Dow Jones News
By William Watts, MarketWatch
AbbVie buys Allergan in $63 billion deal
Stocks fell Tuesday morning as investors awaited remarks by
Federal Reserve Chairman Jerome Powell, while also looking ahead to
this weekend's expected meeting between President Donald Trump and
Chinese leaders Xi Jinping amid growing hopes for cease-fire in the
U.S.-China trade war.
The Dow Jones Industrial Average fell 0.2%, or 60 points, to
26,663, while the S&P 500 index lost 7 points, or 0.3%, to
2,937 and the Nasdaq Composite Index gave up 25 points, or 0.3%, to
7,981.
On Monday, the Dow eked out a gain of 8.41 points, or less than
0.1%, to end at 26,727.54, leaving it just 0.4% -- or around 100
points -- away from its all-time closing high of 26,828.39 scored
on Oct. 3. The S&P 500 ended 5.11 points lower, down 0.2%, at
2,945.35, while the Nasdaq Composite fell 26.01 points, or 0.3%, to
end at 8,005.70.
Stocks have rallied in June, fueled in part by growing
expectations the Federal Reserve will deliver an interest-rate cut
as early as next month, with perhaps additional easing by year-end.
Last week's Fed policy meeting, and remarks by Powell, reaffirmed
those expectations. Moves toward easing by other major central
banks have also been credited with lifting sentiment.
Trump and Xi will likely meet Saturday on the sidelines of the
G-20 meeting. Expectations they will agree at least to a cease-fire
that would avert the imposition of tariffs on a further $300
billion of Chinese imports have also been credited with lifting
stocks, though some analysts view those hopes as misplaced.
"The recent G-7 central bank market rally is stalling as the
market does not seem that confident of a Trump/Xi Jinping trade
break through at this week's G-20 gathering," said Dean Popplewell,
v.p. of market analysis at Oanda, in a note.
Powell will be in the spotlight Tuesday in a busy day for Fed
speakers. He's set to deliver a speech on the economic outlook and
the Fed's monetary policy review at the Council on Foreign
Relations in New York at 1 p.m. Eastern.
Meanwhile, U.S. Trade Representative Robert Lighthizer and
Treasury Secretary Steven Mnuchin spoke by phone with Chinese Vice
Premier Liu He on Monday, Bloomberg reported
(https://www.bloomberg.com/news/articles/2019-06-24/lighthizer-spoke-with-china-s-liu-he-monday-by-phone-ustr-says-jxb06q07?cmpid=BBD062519_MKT&utm_medium=email&utm_source=newsletter&utm_term=190625&utm_campaign=markets),
with China's commerce ministry saying they had agreed to continue
communicating.
Later in the session, Atlanta Fed President Raphael Bostic
participates in a panel discussion on housing at noon Eastern. St.
Louis Fed President James Bullard, who dissented at last week's Fed
meeting in favor of a quarter-point rate cut
(http://www.marketwatch.com/story/feds-bullard-says-he-wanted-interest-rate-cut-as-insurance-against-slowing-economy-weaker-inflation-2019-06-21),
is speaking at his bank's Homer Jones Memorial Lecture at 5:30
p.m.
Investors are also watching the Middle East, with continuing
tensions between the U.S. and Iran driving gold prices toward a
six-year high. Iran said Trump's decision Monday to impose
additional sanctions
(http://www.marketwatch.com/story/trump-signs-executive-order-imposing-financial-sanctions-against-iranian-leaders-2019-06-24)
on Iran had closed the door to diplomatic negotiations. Iran last
week downed a U.S. military drone near the Strait of Hormuz, a key
oil transportation choke point, and has been blamed by Washington
for attacks on tankers in the area. Iran has denied responsibility
for the tanker attacks.
Shares of Allergan PLC(AGN) soared almost 28% in trade after
AbbVie Inc.(ABBV) said it agreed to buy
(http://www.marketwatch.com/story/abbvie-confirms-deal-to-buy-allergan-for-45-premium-valuing-allergan-at-617-billion-2019-06-25)
the pharmaceutical company in a deal valued at $63 billion. AbbVie
shares were off nearly 14%.
FedEx Corp. (FDX) is scheduled to report fourth-quarter results
() after the closing bell. Separately, the company, after
previously botching deliveries for Huawei Technologies, filed a
lawsuit on Monday
(http://www.marketwatch.com/story/fedex-sues-government-over-order-to-block-shipments-to-huawei-2019-06-24)
to stop the U.S. government from requiring the package giant to
enforce a crackdown on the Chinese telecom equipment maker.
Shares of home builder Lennar Corp.(LEN) rose 0.6% after
reporting second-quarter earnings and revenue well above
expectations
(http://www.marketwatch.com/story/lennars-stock-surges-after-big-profit-revenue-beats-2019-06-25).
Grubhub Inc. shares (GRUB) rose 6% after Citi Research analyst
Mark May upgraded the stock
(http://www.marketwatch.com/story/grubhub-stock-jumps-after-citi-upgrade-2019-06-25)
to buy from hold, citing the food-delivery company's ability to
continue to expand food sales.
(END) Dow Jones Newswires
June 25, 2019 09:47 ET (13:47 GMT)
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